Tom de mark sequential monitor for nifty50 stocks

monkeybusiness

Well-Known Member
I know, I read his post too before yours :D
That's why I was grinning but Vivek Bhai is taking good strides.
I bet any new comer would never have any new doubts about TD by the time we chew the fundamentals here.
Yup, Once Vivekbhai has previously done it with IDF, only TD is more complicated than IDF. All the best to Doctor Saab from me.:thumb::thumb::thumb:
 

vivektrader

In persuit of financial independence.
Summary thus far:

BUY SETUP EXAMPLE

1. A buy set up starts with a bar after a bearish flip or a change in market sentiment from up to down.
A Bearish TD Price Flip occurs when the market records a close greater than the close four bars earlier, immediately followed by a close less than the close four bars earlier.

2. Each bar in the buy setup has a close lower than the close of the bar 4bars earlier.

3. The setup has to be at least a set of 9 consecutive bars, any interruption will lead to cancellation.

4. The setup can continue that is beyond a mandatory 9, until the relationship is maintained (point no. 2), these extra bars are marked by a star on their tops by the AFL.

5. Setup perfection:
Low of bar 8or9 must be lower than lows of bar 6 and 7.
Purpose: it increases the odds in our favour otherwise chance of a revisit/test to lower prices is high.
The perfection if not occurred at 8or9 mostly occurs with in 1-4 bars.
However an imperfect setup doesn't delay or diminish the countdown.

6.For buy countdown to start,
requirements:
a) a completed buy setup of minimum 9bars.
b)INTERSECTION is must in stocks and commodities, for indices rule is not strict.
Intersection: basically an overlap of bar 8 or 9 with 3bars earlier i.e. 8 with 5 or lower up till bar 1 of the setup
or 9 with 6 or lower up till bar 1 of setup.
Purpose is that we don't proceed to countdown in a runaway one sided market and some sorts of brakes/ correction has already been applied.
If the intersection does not occur at 9,countdown is deferred until that overlap occurs on a bar with a bar 3bars earlier or lower up to bar 1 of the setup.

7.if intersection occurs by bar 9 of completed buy setup, this bar 9 can be counted as bar 1 of the countdown if its close is lower than or equal to low 2 bars earlier.

8.Countdown need not be consecutive.

9. Additional Specific condition for bar count no.13:
The low of bar 13 should be lower than or equal to close of CD bar 8 or any other interim low.
Until that occurs CD 13 is postponed.

Selection of reference buy setup if multiple buy setups occur while countdown is underway:
Say, completed buy setup 1 (BS 1) is followed by another buy setup 2 (BS2)
1. If true range of BS2 is less than BS1, BS1 will be selected and CD will be based on that.
Note: true range of the setup will also include the additional bars that may occur after bar 9, say if the buy setup continued till bar 12, entire range of bar 1-12 will be considered and compared.
2. If true range of most recently completed buy setup say BS2 is more than true range of BS1 (but less than 1.618 times range of BS1), BS2 is considered as a reference for countdown to begin, any Countdown if started based on BS1 stands cancelled

Countdown cancellation criteria:
1. After a completed buy setup, the buy countdown that started stands cancelled if a sell setup is completed.
2. After a completed buy setup, the buy countdown that started stands cancelled if a bar from prospective sell setup closes above TDST resistance line (derived from BS1)
3. If a TD buy setup that started before/on or after the completion of buy countdown, completes 18bars before the appearance of bullish flip, the countdown stands cancelled.

After a completed buy CD 13, long entry options:

Aggressive approach: a bar close above its open, i.e. first bullish close after CD 13.

Conservative approach: enter long after a bullish flip, i.e. bar 1of the prospective sell setup.

Stop Loss for a buy setup:
Locate the true low (lowest low) of the setup, from that subtract the true range of the bar that constitutes the true low.




Vivek
 
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TD Sequential indicator consist of two components. TD Setup is the first one and it is a prerequisite for the TD Countdown – the second component.

1.TD Setup
TD Setup compares the current close with the corresponding close four bars earlier. There must be nine consecutive closes higher/lower than the close four bars earlier.

TD Buy Setup - prerequisite is a bearish price flip, which indicates a switch from positive to negative momentum.
– After a bearish price flip, there must be nine consecutive closes, each one less than the corresponding close four bars earlier.
– Cancellation - If at any point a bar closes higher than the close four bars earlier the setup is canceled and we are waiting for another price flip
- Setup perfection – the low of bars 8 or 9 should be lower than the low of bar 6 and bar 7 (if not satisfied expect new low/retest of the low).

TD Sell Setup - prerequisite is a bullish price flip, which indicates a switch from negative to positive momentum.
– After a bullish price flip, there must be nine consecutive closes, each one higher than the corresponding close four bars earlier.
– Cancellation - If at any point a bar closes lower than the close four bars earlier the setup is canceled and we are waiting for another price flip
- Setup perfection – the high of bars 8 or 9 should be greater than the high of bar 6 and bar 7 (if not satisfied expect new high/retest of the high).


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2. TD Countdown - after a setup is finished the countdown can begin from bar 9 of the setup.
TD Countdown compares the current close with the low/high two bars earlier and you count 13 bars. Unlike the Setup, the Countdown doesn’t have to be a sequence of 13 consecutive price bars. If it is interrupted you just do not count the bars and when it resumes you continue counting further.

TD Buy Countdown starts after the finish of a buy setup. The close of bar 9 should be less than the low two bars earlier. If satisfied bar 9 of the setup becomes bar 1 of the countdown. If the condition is not met than bar 1 of the countdown is postponed until the conditions is satisfied and you continue to count until there are a total of thirteen closes, each one less than, or equal to, the low two bars earlier.
Countdown qualifier - The low of Countdown bar thirteen must be less than, or equal to, the close of Countdown bar eight.
Countdown cancellation:
- A sell Setup appears. The price has rallied in the opposite direction and the market dynamic has changed.
- close above the highest high for the current buy Setup (break of TDST for the current Setup)
- recycle occurs ( new Setup in the same direction and recycle activated )

TD Sell Countdown starts after the finish of a sell setup. The close of bar 9 should be greater than the high two bars earlier. If satisfied bar 9 of the setup becomes bar 1 of the countdown. If the condition is not met than bar 1 of the countdown is postponed until the conditions is satisfied and you continue to count until there are a total of thirteen closes, each one greater than, or equal to, the high two bars earlier.
Countdown qualifier - The high of Countdown bar thirteen must be greater than, or equal to, the close of Countdown bar eight.
Countdown cancellation:
- A buy Setup appears. The price has rallied in the opposite direction and the market dynamic has changed.
- close below the lowest low for the current sell Setup(break of TDST for the current Setup)
- recycle occurs (new Setup in the same direction and recycle activated)

Aggressive TD Sequential – the difference is the Countdown phase. You compare high/low (not the close ) with the high/low two price bars earlier.
Aggressive Sequential always produces buy and sell signals before Sequential does.


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3. TD Combo
TD Combo is better when you have sharp directional moves, because it requires only thirteen price bars from start to finish compared to TD Sequential which needs at least 22 bars. The criteria for a Setup within TD Combo are the same with those required for a Setup within TD Sequential. The difference is that the count starts at bar 1 of the setup and not from bar 9 and TD Combo requires four conditions to be satisfied simultaneously.

Requirements for a TD Combo Buy Countdown
- close lower or equal than the low 2 trading days earlier.
- The low of a countdown day should be less than the previous "trading day‘s" low
- The close of a countdown day should be less than the previous "trading day‘s" close
- The close of a countdowns day should be less than the previous "countdowns day‘s" close
- bars 11,12,13 each one should just close successively lower and the other rules above are not applied

Requirements for a TD Combo Sell Countdown
- close higher or equal than the high 2 trading days earlier.
- The high of a countdown day should be greater than the previous "trading day‘s" high
- The close of a countdown day should be greater than the previous "trading day‘s" close
- The close of a countdowns day should be greater than the previous "countdowns day‘s" close
- bars 11,12,13 each one should just close successively higher and the other rules above are not applied


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Bearish Price Flip - occurs when the market records a close greater than the close four bars earlier, immediately followed by a close less than the close four bars earlier.

Bullish Price Flip - occurs when the market records a close less than the close four bars before, immediately followed by a close greater than the close four bars earlier.

TDST level – this is the highest high(usually the high of bar 1) for a buy setup or the lowest low(usually the low of bar 1) for sell setup, also called true high/low for a Setup.
- If a move cannot close above or below the TDST level of the most recently completed Setup in the opposite direction that means the momentum is weak and this is just a corrective move.
- If a move closes above/below the TDST level of the most recently completed Setup in the opposite direction that means that the momentum is strong enough and the price should then continue in that direction , and with high probability a TD Countdown will be completed before a reversal occurs.

True low/True high – is the lowest and the highest point for a setup, BUT including gaps before bar 1 and the days after the 9-th bar, qualifying for a setup bar.

Sell zone/Buy zone after finished TD Sequential – find the bar which records the highest high/lowest low for the countdown, find the range of the bar plus gaps and project it from the high/low of the bar. After finished TD Sequential/Combo the price should make a top in this zone not later than 12 price bars after bar 13 for the countdown. If the market breaks this level the signal is negated and we are witnessing renewed strength.

Setup Recycle - A second setup appears in the same direction before/on/after a Countdown - that usually means strength. The question is recycle and start a new Countdown? (there must be a price flip to divide the two setups or the first just continuous)
Compare the size of the two setups. The size is the difference between the true high and true low of a setup.
- if the second setup is equal or greater than the previous one , but less than 1.618 times its size, then Setup recycle will occur – the trend re-energize itself. Whichever Setup has the larger true range will become the active Setup.
- ignore setup recycle if the new setup is smaller or 1.618 times and more, bigger than the previous one – most probably price exhaustion area.


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TD Sequential Reinforcement - 9-13-9 sequence
After a Buy Countdown the market temporarily trades higher and produces a Price Flip and subsequently a TD Buy Setup appears, this is known as a TD Sequential 9-13-9 Buy Count.
Requirements for a valid Sequential 9-13-9 Buy Count:
- The Buy Setup must not begin before or on the same price bar as the completed Buy Countdown
- The second Buy Setup must be preceded by a bullish Price Flip
- There must be no completed Sell Setup prior to the appearance of the Buy Setup.

After a Sell Countdown the market temporarily trades lower and produces a Price Flip and subsequently a TD Sell Setup appears, this is known as a TD Sequential 9-13-9 Sell Count.
Requirements for a valid Sequential 9-13-9 Sell Count:
- The Sell Setup must not begin before or on the same price bar as the completed Sell Countdown
- The second Sell Setup must be preceded by a bearish Price Flip
- There must be no completed Buy Setup prior to the appearance of the Sell Setup
Reference: Above Notes are from http://practicaltechnicalanalysis.blogspot.in/2013/01/tom-demark-sequential.html

Happy :)
 

VJAY

Well-Known Member
Dear vivek,
Please check this ...waiting for CD13 i think

 

VJAY

Well-Known Member
is this CD cancelled as last bar closed above R??
 

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